''Seeking not Only to Be Loved, but Also to Be Lovely'' Mike Munger on Sharing and Human Flourishing

[Music] Welcome to the Mega Blast Podcast. I'm your host Jason McDowell. My goal is to get to Truth through Conversation. The Mega Blast Podcast is produced by Art and Opinion, an online journal. How's that the archives of Canon? Visit us at artsandapinion.com. I hope you enjoy today's guest. [Music] So, welcome Mike Munger. How you doing? I'm just fine. It's great to be here Jason. Thank you so much for coming on. Before I get started, Happy St. Valentine's Day and to you and yours. People are going to start to talk. If we start to meet like this. This is a wonderful day for me because I've been a fan of yours for a long, long time. I'm going to flatter you here for a while. I'm familiar with your work mostly through the podcast you do with Russ Roberts, your friend and colleague. And you have the record on there of the highest number of podcasts on e-contact. Is that right? Sure, but that is only because whenever he isn't sure what he's going to do or doesn't have time to read a book, he has me on. And that happens really often. Okay. If he doesn't have time for a real guest, he'll say, "Gammon, I'll get Munger." Well, it's amazing because I'm going to come back to that later. Because one of those podcasts turned into a book as far as I can tell. At least one, if not more. So, whatever you guys are doing, it seems to be working. Or else, I'm not very original. He has nothing to say. We talk about something and then that's all I have to write about. Okay. One thing I wanted to say about those is that you two guys seem to be very well matched in the sense that you seem, you have a very kind of a powerful voice and you're sort of a big extroverted person. And I say that complimentary way and I'm like that too. You know, Russ is very, very calm and subdued. I think it creates almost like a Yin Yang balance. I don't know. Do you think that's true? Well, I'd like to think that it's true. He is, he often will start giggling because we have a lot of fun together. We've done it quite a few times. I was the second episode ever in 2006. And that was back before we took it very seriously. He has built econ talk into something of interesting and important. A lot of the episodes get 100,000 listens. On the other hand, some people have taken to calling it prostate talk lately. I have to admit because there was quite a bit about, you know, doctors and dying. So the joke is that now it's an elderly Jewish man contemplating his own mortality. Yeah, well, history is replete with those. I mean, you know, there's some great, some of the greatest comedians, right? I mean, you got little Brooks and Larry David. I mean, that's kind of what they're doing now too. Right. So he's a good company, right? Yeah, no, no, Brooks had that skip the thousand year old man. Right. Right. Yeah. Okay, the objective of this podcast is to I want to talk about what you do at Duke University is part of it. And later on, I want to really go into the sharing economy, which you've done a lot of work on. And I'm doing that with a class this session. I have a advanced language class and it's a business class. We're doing the whole thing on the sharing economy. So I really wanted to get I want to get to that a bit later. But you are at Duke University. And what's interesting to me is you're the director of philosophy, politics and economics. So I think most people would say politics and economics will they obviously go together. You know, you, you know, you elect a politician. He goes to Quebec City or whatever, you know, they make a lot of money, wage or tax policy or something like that. And then they pass it and then that affects the economy and the economy is adjusted and so on. So you imagine Justin Trudeau or Fasuela Go or some American governor or something like that doing these things. But when I think about philosophers, I have an image of Socrates or John Locke with his fountain pen talking about, you know, these philosophical concepts. And I can, I can see a connection between philosophy and economics. But you have clearly got like you clearly are interested in how they connect. So how, how do they connect exactly? Well, philosophy of politics and economics started in Oxford University in 1924, 1925. They had a curriculum, which with typical commonwealth bravado, they called greats. It actually referred to the great work. So it was kind of a classic books curriculum and it was determined that that was insufficient to create a cadre of people who could run an empire. And they decided that they would introduce a new curriculum, which was a selection of courses from philosophy, politics and economics. If integration were to take place, it would take place in the minds of the students, the faculty just taught their own courses. The result was that there was maybe unexpectedly, they had hoped, but maybe unexpectedly there was a synergy among those three and it proved useful for creating potential leaders. Now, some people say that PPE is the ultimate blaggers degree and I should translate that from English into English. The blagger is someone you can speak with great authority on any subject for 30 seconds. That sounds like an insult, but in fact, that is something that a liberal arts education produces. I know where everything goes. So if I have a 20 minute meeting with a consultant about a scientific problem, and then I talk to some people who are working in a not very wealthy neighborhood in Toronto to try to improve education or attack system where I'm. I'm worried about equity. I need to be able to talk about the connections among different two of those three. So almost everything that politicians do involved some two of the three, the P, the P and the E. And obviously there's multiple ways you can connect that now you might say that there's other interdisciplinary studies that would also be good. That's true. This is not the only interdisciplinary study out there, but it is something that has proved the test of time for leadership because it creates people who recognize the difficulties and the tensions among these different ways of approaching problems. That's really fascinating. So it has its origins in the British Empire and in sort of a worldwide. You know, it sounds like you're saying it creates people who are generalists that they can have a kind of global few is that one way to think about that's right. But what I worry about is that without careful thought. Like PPE could produce people confused in three disciplines. You want to have sufficient depth in one or two of them that traditional majors exist for a reason. So there's always a tension between someone who knows a little bit about a lot of things and someone who actually understand something but then goes to the trouble of problematizing that because can then you have to confront the way that people other disciplines. And then you have to have other disciplines also do those things and maybe do them differently. Yeah, that's that's wow. That's that's interesting. So that's kind of the technical background within the university system. I sort of look at it and I think when I think about economics, you know, I'm, you know, I've read. I think I like people like Adam Smith and stuff like that. It seems to me that economists, if they're really thinking clearly should be thinking about why? Like what bleeds to a good life other than just, you know, satisfying, you know, hungers and things like that, right? So I do you think there's some sort of a connection there? I mean, Russ Roberts talks a lot about this, right? Like, you know, what's a moral. You know, do you have any thoughts about the morality connecting to economics? Sure. And let me say that what you just said is spoken like a wealthy person. Okay. If you're a poor person increases in prosperity or really your main concern, if I can get a motorcycle or a refrigerator in a washing machine, I'll be a lot better off. If you want to talk about equity and philosophy, we'll talk about it that now for a society. Yes, those are legitimate concerns and that's why. PPE problem. Matize is some of the things that economists do. But if I'm a doctor working on a particular disease, it's okay for me to specialize. Economists work on a particular disease called poverty. And we have discovered that there are some things that seem to lead out of poverty better than some other systems. And that was one of the things that Adam Smith was talking about in the wealth of nations. Poverty is the universal human condition. It's what happens when things are broken. In order to get prosperity, you need to have a system that Adam Smith said that elaborates division of labor. So if we have a system that elaborates division of labor, it's going to create some subsidiary secondary problems. But that's like treating side effects of an effective medication. First thing we need to get for most people, most of the world is an increase in prosperity. And that actually has happened in the last hundred years, the proportion of people in desperate poverty has fallen from 80% to less than 10%. And that's a very controlling for purchasing power. It is it is an enormous achievement. Now that doesn't mean that there's no more problems. But let's not minimize that achievement. That's very significant. Now we need to worry about the side effects. I mean, it's it's most, most many people seem to put around 1870 as kind of one of the beginning times. But if you look even in this century from the year 2000 up to now, it's astonishing how many people have been, you know, come up out of the absolute penalty of, you know, living on. What is the bottom of it's around a dollar 35 US per day or something is considered a lot of people now use something like $2.5 per person per day. And if you start at 1950, the big change has been in China and India. That's where most of the population of the world is. And there's been just an enormous decline. Now, maybe you can say $3 a day per person's not enough. That's easy for me to say if I went from $1.75 to $3.20 per day, what an enormous difference in the quality of my life. Yeah, I think people really underestimate this. I feel a bit embarrassed that I sounded like a person who wasn't because I often harp about this in class. How important it is. You're a skilled interviewer. You are asking a question to elicit a response you expected. So that's fair enough. No one's confused. Yeah, because it's so in other words, just to specify it's repeat what you said a minute ago. Sometimes people say, poverty needs no explanation because poverty is just the natural state of human beings because human beings we struggle against storms and, you know, bad, you know, bad, you know, not enough food and so on. So forth in our natural lack of trust, crying, the worst, worst, war fighting animals that can kill us, whatever it is diseases, bacteria is, I mean, you name it. They're trying to kill us. Right. So what needs an explanation is how can we get out of that to where we can be protected and insured in some senses from those things and wealth does that. That is to increase wealth. You also said that that certain systems produce better results, right, than others. And that seems kind of obvious. I like to use examples in my classes of what are called natural experiments. Right. So one I use is a shopping center in California where on one side, the minimum wage went up by $2.00 and on the other. And so many of you may have heard of this and it's a famous case. And the other two obvious ones I talk about in class are what regarding what you were saying, you know, South Korea and North Korea and East Germany and West Germany where you take the same more or less the same culture of people. But look at them up and see what here's one economic system economic and philosophical system. And here's another one. And it seems obvious that communism resulted in worst results if you're concerned about rising wealth and more human freedom for individuals. So I don't know. Do you have any thoughts on that? Well, communism is not actually a viable system over time because it. Communism has never been successfully tried at scale. Both of the systems that you mentioned are actually socialist. So there were centralized authority that were making attempts at planning an economy. And in the absence of price information, it is very difficult for central authorities to make judgment about the relative value of resources. It means a lot of resources get wasted. They don't get used very well. And so even a lot of what should be the wealth that those societies have is not used very effectively. It turns out that socialist systems, the countries that have tried to use socialist systems either have just ended up in abject poverty or turned away from it. And so the two things that I always make two points that I make to my students Sweden Norway Denmark are among the world's most capitalist countries. They went along more or less socialist. A lot of stay-don't-enter prices and somewhere between 1991 and 1993. They looked over the precipice and said, we're not making enough surplus to finance the welfare states that we would like to be able to provide. And so all of them terms sharply in the direction of capitalism. And famously in 2016 when Bernie Sanders was talking about socialism and Denmark, have we wanted to be socialist like Denmark, the Danish prime minister publicly admonished Bernie Sanders and said, we're a capitalist country. I don't know where you're getting this. We're a democracy and it happens that we vote for a welfare state. But our economic system is heavily capitalist. Second point I make to my students can they're surprised because they think those countries are socialist. Well, it may have been when their do tarred professors were educated, but since 1993 they've sold off all their stay-don't-enter prices. The second point that I make is that I ask students consider workers from the wealthiest to the poorest in the world. Now, suppose that you are a minimum wage worker in the United States. Where are you in terms of percentile? The answer is 94 percentile. There's only 6 percent of people in the world who are wealthier than a minimum wage worker in the United States, which explains why if we're considering building a wall, it's not to prevent people from escaping like in East Germany or in North Korea. If if US is going to build a wall, it's because it's very difficult to handle all the immigrants who want to be poor in the United States instead of middle class in their home countries. And I think it is difficult for students to reconcile their notion that somehow the inequalities of income in the United States and being poor in the United States are so awful with the fact that being poor in the United States is actually pretty great. Not me if you have mental illness, you have health problems, that's all fine. But just straight up, if you're able to participate in the economic system, you live in a wonderland. Yeah, that people, I think this is very poorly understood. It's got to do with productivity. So every Canadian or American or French or Danish worker is much more productive than every Congolese or Burmese or Brazilian even even Latin America is sort of in between. So what that means is if you're making minimum wage in Quebec, it's $15.25 Canadian per hour. If you can save 20% of that, that's actually going to aggregate up to a fair amount of money that you can and the cost of other things like television, cents or cars is pretty much the same across the world. Like it doesn't really change. So if you're making $500 a year in the Congo, if you're going to buy a car, it's still going to cost $10,000. So if you're making $500 a month in Canada, that's literally 10 times. So I think people, it's, there's a lot of wonky numbers here, but I think many young people, they confuse a difference between the person at the bottom in Canada and the person at the top in Canada versus looking across space where the context is completely different. Is that one way to restate it? Is that sure? I think that's also true that in many of those poor countries, some of them have quite a bit of inequality, but a lot of them don't have that much inequality because everybody's poor. I want to emphasize that I think that the problem is not inequality, the problem is poverty. Now solving the problem of poverty may create inequality. That bothers you. You're probably rich because again, poor people, if you actually get out a little bit and talk to poor people, what they would like is to have a little more for themselves and for their families, a little more sense of security. The reason that people make a desperate effort to get to Canada, to get to the United States and to get asylum, sometimes from political persecution, but sometimes just from economic hardship, it's perfectly understandable. Inequalities of price, we ought to be willing to pay unless you want to instantiate the sin of envy as a moral good. Now, I think a lot of what mess there are concerns about social justice that are fair enough. But envy is a sin. It's not a motivation for justice. That's a very fascinating way to put it because it sort of slides us right into philosophy, right? Because you've mentioned envy. What's the difference between jealousy versus envy? If I'm jealous of a person with a really nice car, I sort of think, wow, that guy's got a great car, you know? So I'm jealous of him. In other words, I want the car. I want to maybe I work hard, you know, whereas if I'm envious, I would rather smash the car to smithereens and that he not have the car because because I want him to be as poor as me, right? It's what. Yeah, I mean, I feel bad to see these tall buildings and nice cars. And I would feel better if they were denied that even if I my situation were not improved. That's right. That's a terrible way to think about it. It's morally offensive and it's it's kind of what really like when I think about when you mentioned earlier that poorer societies are more equal, the, you know, people often talk about Cuba, right? As sort of, oh, the great healthcare, you know, Cuba is less unequal now than it was in 1958. In other words, there's less of a difference between the rich and the poor because there's just more general poverty. Yes. And so one problem is Cubans are now much poorer than Dominicans or Mexicans or, you know, other people around, you know, putting Venezuela to decide for a minute that's collapsed into for a different reason. But it's, you know, this, this is very confusing to people, but I wanted to say too, your words are probably going to resonate with a lot of my students who are going to be listening to this because at least half of our students have origins. They're native born Kibbikwa Canadians, but at least half of them have origins or are immigrants from places like Haiti, Latin American countries, North Africa, where they, they understand, you know, they go back and visit their grandparents in Morocco or something and they see countries that are, you know, this is, I want to make clear that, you know, that I'm not making any sort of generalized statement about the human beings in those in in developing countries. It's not a statement about the quality of the people. It's just people in developing countries are often suffering that poverty is one way to state it, right? Well, and one of the big reasons for the persistence of poverty is the absence of property rights and the inability of people to find ways to serve each other. So one of the things that I think if you haven't banned, I've spent a fair amount of time in Cuba. If you go to Cuba to Africa to a nation where there is quite a bit of poverty, it's not that there's no entrepreneurship. Everybody's an entrepreneur. Everybody has a side hustle. So the professors at university, Dada Abana in Cuba, when I was there, they drove taxis on the weekend because they made so little money. So the, there's no shortage of entrepreneurship. There's no shortage of human energy and creativity. What there is is an incapacity to translate that energy into a way that I can serve other people and get rewarded for it. Yeah, that's the obstacle. Yeah, well, the obstacle is usually created by some sort of intervention from above, which is to say, a government or also another problem because that's Cuba. You've got a social assistant, which is intervening to, to, to express it. Another problem in many African countries, I think, is that there's not enough security as in police and courts that can mediate when people have disputes with each other to protect the property. And then that, you know, that creates a system where people need guns. My ex-wife was Dominican and, you know, people in Dominican Republic, they have guns in their houses because, you know, someone can break in and steal stuff so you want to be able to shoot them. And you can't call the police at night and things like that. So that, that has an almost an equally problematic effect, which is to say the first thing the government should be doing is trying to secure the property rights, not just for the rich people, but for the people down the line in, you know, in foreign neighborhoods as well who won't, should be able to own their own property, right? Sure. And the, one of the characteristics of poverty is not just lack of resources, but insecurity of the resources that one does have. And that combination of insecurity and lack of resources is, it, it means you're stuck. There's nothing that you can do. There's no way out. It's not like I can try to save stuff because it's probably going to be stolen. It's not like I can build a restaurant because I won't have property rights to the land of government officials will come around and say, hey, this is a nice restaurant. Would be ashamed if something was to happen to it. I think you need to pay me another $100 a month to make sure that nothing happens to it. So it's government officials themselves that are subjecting people to the classic protection racket. Yeah. And there's some, there's some interesting cases on this recently. I'm sure you're probably following what's happening in El Salvador where they had, it wasn't the government. It was kind of mafia people that were, you know, extortion rackets that had gone wild. And now there's a, sort of, I suppose he's a strong man. There's one way to characterize this Bukheli guy, that good's name, who's intervened. And it seems to be working. I'm a little hesitant because I, you know, I'm very suspicious of government power generally. So I worry what could happen later on. On the other hand, it was, it was so difficult in that country, just to, you know, bus drivers had to pay that. And you know, the guy would come on every week and collect half of what you collected from the people. And, you know, if you didn't, they'd be breaking your legs and stuff. So I don't know. Is that is, is that something that could, for places that are unstable, it's just to have a kind of imposition of authority that's going to really come in and, and, and suppress elements that would steal from people. And, you said, Thomas Hobbes was not wrong, that the, the state of the war of all against all and insecurity of property is impoverishing. And that having a centralized strong government that prevents that is better. I would hope that there's a third alternative. But if those are your only two choices, yes, a strong centralized government is better than chaos and widespread corruption. So the, sometimes people point to Singapore on, on those ground. Singapore was quite corrupt, relatively poor, puts a strong man dictator in place. It happened that this, that the, the dictator was pretty pro market and pro open economy. And Singapore, of course, is well placed. This beautiful natural harbor. It's an antropo for all sorts of, of shipment. And they became wealthy. But that doesn't mean that every country should say, and all right, what we need is a strong dictator. Singapore got lucky. And they had a Singapore who, they had a dictator who wanted things that actually did produce public goods. It's not clear that you won't become Bennett's Waila if you get a bad dictator. So that, that's not really a way out. I'm afraid we're stuck with some sort of liberalism and some sort of constitutional republic as the way out of poverty, even though that's a political system, as long as you have a, a constitutional republic and a capitalist market system, every country that has successfully implemented that has become wealthy without exception. >> Provided they've done the democracy thing repeatedly enough that it doesn't become a way that you can vote for people to pay you. That's even a problem in our system, right? You have to have repeated elections where, and also another thing I think that's important is that is a Chinese wall between the civil service and the, the elections. I mean, you know, many countries, democracy have some, not many countries, but sometimes it can devolve into a system where vote for me and I'll give you stuff, can I? >> Yeah. Well, Argentina and India both have democracy without constitutional protections for property. So I was careful to say, yeah, constitutional republic. So constitutional republic with protections against majority power, because it is the protections against majority power that make for the possibility of prosperity. And you can see in Argentina and India, two great powerful countries that have just systematically gutted themselves by making a series of majoritarian promises. Vote for me and you'll fart through silk in no time. >> Yeah. There's a secondary problem, which is perhaps harder to deal with, which is the ethnic problem where you have ethnic groups that can group it. Okay. I want to transition a little bit into the sharing economy, which you've, the sharing economy is part of the reason that you and I were brought together. I may have mentioned this to you in an email, but I drive Uber on the side and I picked up this guy who's a French Canadian economist called Vassant Géreaux. And, you know, we became friends after the Uber ride and so on. And that was how I was connected to you, in fact. So that's kind of a benefit. But the sharing economy, I'm finding it interesting with my students because it seems obvious to me what it is that it's kind of of a, it seems obvious what it is, but I think a lot of people don't see the line between, you know, business, business, and individuals using a dead asset, right? So, so I mean, if we just define the sharing economy quickly, it's, I have a car, and I drive my car twice a week, and the other days I don't need it. So I put it up on Turo, and I rent it out, right? If Turo didn't exist, my car would be what is known as a dead asset, which is sit there and wait for me to use it. I have a condo, I have a room in the back with a bed that my, you know, my friend comes once a year and stays there, and it's a dead asset. Sit there, it's worth zero dollars, and then with Airbnb, I put it up, and I can rent it out for 50 bucks. When people want to come and see the Canadians play, you know, the New York rain, so whatever, from out of town. What's interesting I found in my classes is, you know, when I asked them the question about what, what some of the other things people could, you know, could, could do, which is what your book is about, they were coming up with things like tuxedos and things that are sort of traditional businesses, and I'm not sure why this is. I mean, is it people have trouble seeing how dead assets by individuals is different from what a business might do, like Avis or Earths or a hotel? I'm just, I don't know, it's not really a very clear question, but I'm just a bit surprised how, how obvious it seems to me, and how maybe it's not as obvious as I've thought. Well, I have a lot of thoughts on that as you might expect. The sharing economy is a combination of two separate things, and you have to disentangle them. That's why I think a lot of people are confused. One of them is the reduction in transaction costs. So we're able to use apps on phones and other digital communication devices to reduce the transaction cost of finding each other, and the three kinds of transaction costs that matter are triangulation, transfer, and trust. We have to be able to find each other. We have to be able to deliver the good or service, make the payment, and we have to rely on each other's assurances. The second is the commodification of excess capacity. There's all sorts of things that we have that are being underused. For the most part, we think of those as something we would pay to store. So students at Duke, for example, over the summer, they have a bicycle, they'll pay $20 a month to store it. Suppose that instead they had some reliable means of renting it out, and they rented it out for $5 a month over the summer. Well, they're actually making $25 a month, the $20 per month that they would pay to store it, that they don't have to pay, and the $5 per month that they get as revenue. So that's a big difference, and that bicycle is now being used. So we have plenty of stuff. It's just in the wrong place. What people are confused about is they think that Uber sells taxi rides. They think that they think that Airbnb sells hotel rooms. That's not true. What those companies sell is connections. There are plenty of people that have a car in a few minutes, and there are plenty of people who want to ride. Now, I have a black BMW 330. I'm just the sort of asshat you think I am coming up behind you flashing my lights. But let's say I pull up beside a young woman walking by the side of the road, roll down my window in my black BMW and say, "Hey, you want to ride?" No, no, she says not. That is really creepy. But the fact is that that transaction takes place all the time. All the time. In the context of an app where you can solve the, it's not creepy. I can actually say where I want to go. We can negotiate a price. We can make the payment, and it's all seamless. So if we reduce the transactions cost, there's a bunch of mutually beneficial transactions that can now take place. So you should think of transaction cost as friction. So when an engine, friction makes the engine run hot, but it dissipates the energy into heat rather than actually delivering energy. So if we can provide some sort of reduction in friction by reducing those transactions cost, all sorts of things now become possible. So there's a lot of ways that companies like Uber can enable the better use of cars. The example that you gave is a terrific one about renting your car. I fly almost every week. So let's suppose that I fly into Montreal Airport, and I walk past several big parking garages full of cars with no one in them in order to get to the Hertz counter so that I can rent a car. Why don't we rent out those cars instead of storing them in parking garages? Well, the answer is that transactions cost of doing better too high. It's creepy. I don't want somebody in my car. Well, what if an app could reduce the cost of triangulation, transfer and trust? I'm paying, I think in Montreal, it's $40 Canadian per day to part. It's pretty expensive. So if I could rent my car out for $40 a day, I'd be making $80 a day. And then it's there when I get back, that's much better than paying $40 a day. So I think people in generations from now will look back and say, not only were these people greedy, they were dumb because they had these income producing assets. And instead of renting them out and letting other people use them, because that means that I can get a good quality car at a lower price and we store things a lot less. If I'm driving a New York City, there's a bunch of three lane roads in New York City. Two lanes of them are full of cars that are empty. Think how much more traffic we could have on New York streets if we didn't mostly use the roads to store empty cars. Parking is a stupid idea. That's not something that you should do in high value real estate. We only do it because we're not used to thinking about commodifying excess capacity. There's a an app in Europe. It doesn't exist in Canada or the US, but it's called BlublaCar. And BlublaCar is, and if I'm in Czech Republic or some part of Central Europe, people probably use this to get to class, I can rent, it's hitchhiking. I can rent a truck. So if I'm in Bernou, I want to go to Prague tomorrow morning at nine o'clock and I have to say how much I want to talk. And the three categories are Blubla, which means I don't like to talk very much. Blubla, which means I enjoy a netter or blah, blah, blah, which means I rarely pause speaking even for breath. So I can be matched with a good conversational partner tomorrow morning at nine a.m. and go from Bernou to Prague for 10 euros. It costs 100 on the train. And that truck is going anyway. That's just that that front seat is going to be empty. That person is what in an Uber, you only go there because they say, I want to go here. This truck is going anyway. It's a pure saving. So if we start thinking about commodifying excess capacity and recognizing that it's the reduction in transaction costs that make that possible, we have enough stuff. There can be an enormous increase in effective wealth because people will be able to share rather than own. I have, I'm embarrassed to admit, a writing lawnmower. So does my neighbor. Why? How stupid is that? Once a week for 40 minutes, my big butt sits on this writing lawnmower and then I put it in a shed. And he does the same thing. Why don't we share? Well, transactions cost are high. But if there were an app, five of us should be able to share this very high quality writing lawnmower. And so if we can commodify excess capacity, we can change the world. We have enough stuff. Yeah. In my class yesterday, when I, some of them were really getting it and some of the ideas, two ideas that were very good. One was Tesla chargers. Like what about, you know, it's like, I mean, it's expensive to put one in. If there's one guy on the block who has one, he can rent it out to a bunch of people and it can be being used frequently. The other was pools. Somebody said, what about pools? And I was like, wow, that makes sense. I mean, you have one, one person in the neighborhood as a pool and he uses it once a week and the other days, you can, you know, so I also think that a lot of the growth we've seen over the past, well, not a lot, but some of the growth we've seen is partly this opening up of dead assets. I don't know. I wonder if an economist has ever done a study to try and figure out how much of the growth we've seen is because of Uber and Airbnb and Lyft. I don't know. Do you know anything about that? Well, I think there are some people that are doing studies, but notice that there are two effects. We will need less stuff. So, manufacturing jobs are like, go ahead. Manufacturing jobs are likely to decline. Prices may very well fall in the sense I'll be able to rent rather than own. It means that wages are likely to fall, but economists have a measure for this called real prices. So if prices fall by more than wages, your effective wages increased. And for people that are in that position, the new world will be a great place. However, if you don't really have access to some sort of income producing asset, then it might be that you can't really take advantage of this. One income producing asset might be the ability to write code, or you can learn how to write code using chat GPT. You can have a car. You can have a room. You could own some tools that you rent out. So we may see a return to what used to be in many economies, people would share the things in local communities and that would be how they survive. So you probably can get by with less, but you still have to have some sort of income. Price can't fall enough to make people be able to survive if they have zero wages. And so I think that there is going to be an increase in the sense of economic precariousness because manufacturing jobs are just gonna fall, they've already fallen a lot because of increases in productivity. But manufacturing jobs in 40 hour a week jobs for working class people are going to fall even more. There'll be a lot of service jobs left, but that's pretty frustrating. There's no opportunity for increases in productivity and promotion. - Yeah, the service sector has really become the new working class, I think, in this century as opposed to the previous century. It's, yeah, the other thing that strikes me about that is there's definitely some challenges there, but it's amazing how smart people are. Like most people know what I used the preface to your book and the story about how these two genius architects where we're gonna, you know, they're gonna plan the perfect paths into this university. And then they thought, why don't we just see what people do? And then people, neither of the planners had been able to know what was the best way. So it, how could you? - How could you know? - Right. So it strikes me that as this challenge arises of what are people gonna do, there's just people coming up 14, 15 years old, they're gonna be doing things and they're gonna find some way to do things that are, you know, that you and I can't possibly even imagine, right? That, you know, and there's gonna be things that are invented that we can't even imagine what they are. And there's gonna be new sectors of the world, the same way, you know, Russ Roberts talks a lot, you know, if you go back to, a hundred years ago, almost half of Canadians and Americans worked in agriculture, right? Now, what is that now? Two and a half percent. So it's dropped by, you know, many magnitudes. - And we produce more food. And so if, and Russ often says there, if you had gone and asked a farmer like, well, what, you know, there's only gonna be two percent of you instead of, they would have said things like, well, where's all the food gonna come from? What are people gonna do? There's gonna be unemployment by, you know, mass. And so this is why when I hear people like Andrew Yang talking about how, you know, self-driving trucks is gonna be this cascade of problems because there's all these truck drivers are not gonna be at work and then all the restaurants they go to are not gonna function. I think I don't know. That sounds exactly like the analysis of the farms a hundred years ago, but I don't know. It sounds like we're ending on some positivity. Did you have any thoughts about that? - I would end on some positivity. People have always found ways to improve their lives as a result of being able to get goods and services that were better and cheaper. And so people are creative. They will find new ways to work. And there's a famous example when automatic teller machines were first introduced, it was assumed that this would be a big decline in banking employment. Actually, what it did was made it so much cheaper to open a branch that a lot of banks opened more branches, but now the human being specialized in problem checks, opening new accounts. So what it meant was that the employment in the banking industry actually went up, prices fell, and more people participated as a result of the technological change. So the sometimes change will displace workers, but more often what it does is enable workers. So you get technology working with human beings. And that's more productive than either of those working alone. So that has been the history of the last hundred years, is finding ways to make machines and technology as a kind of force multiplier so that each worker produces more. And since that's true, we can have more and more workers that are producing things that until now were too expensive even to contemplate. So I am very optimistic about that. I think your story is really fascinating because you take that bank teller who was sitting there in 1975 just taking the check and doing that. And you put him or her, maybe they need some education or training into an office and doing things like mortgages and loans, raise their productivity. They're doing something more important in the economy grows and they're doing something more interesting. At least I think it's more interesting. It's absolutely more interesting. It's more making twice as much money. Yeah. Yeah. So just on the finance, on the income side, but also-- No downside. Everything about that was good. Yeah. Yeah. And it means that opening up these things, people need-- it does mean that actual brain power and IQ and intelligence becomes more important. So this is perhaps a challenge that-- That's absolutely what you talk about. People need to feel included and they have to have a sense of hope. Yeah. Yeah. OK. So-- May I suggest that-- Go ahead. Not everyone has-- may know that they have access. So my book on the sharing economy is available for free. As a free PDF download from the Institute for Economic Analysis. OK. This is in London. So if you just look for Munger sharing economy and IEA, you can get a free copy of this wonderful book. OK. I'm going to send that to my students right away because we already did the preface. That was something we read the preface and we did that in class. We're doing it this week. Listen, I just want to say again, thank you so much, Mike. This talk has been a real pleasure. I feel like we just scratched the surface. I don't know if you're interested in the future. Yeah. Let's do it again in a few months. OK. Listen, thank you again. All right. And I apologize for the technical glitch. You'll look. It's bound to happen. I am podcast promiscuous. And so I have often encountered such difficulties. That's just fine. Thanks, Mike. Yeah. I see you. Yeah. [MUSIC PLAYING] Thank you for listening to today's guest on the Mega Blast podcast. I've been your host, Jason McDonough. This podcast is brought to you by Arts and Opinion, an online journal, which is also available in the permitting archives of care. Visit us online at artsandapinion.com. [MUSIC PLAYING]